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Davies Inc. uses activity-based costing. The company has two bedding products: BOLSTER and PILLOW. The annual production and sales of BOLSTER is 8,000 units and

Davies Inc. uses activity-based costing. The company has two bedding products: BOLSTER and PILLOW. The annual production and sales of BOLSTER is 8,000 units and of PILLOW is 6,000 units. There are three activity cost pools, with estimated total cost and expected activity level as follows: Expected Activity (no. of runs for the total expected outputs) Cost Pool Estimated Cost BOLSTER PILLOW Total Weaving $20,000 100 400 500 Cutting $37,000 800 200 1,000 Colouring $91,200 800 3,000 3,800

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